Industrial property prices expected to increase

The price of industrial properties in Penang is expected to rise between 10% and 20% over the next three to four years due to a shortage.

New Bob Group director Dr Lee Ville said that over the past five years, most of the development in Penang was focused on residential housing.

Due to the investments that have poured into Penang over the past two years, the sale of landed industrial properties had been brisk, prompting a substantial surge in the prices of such properties, Lee said.

An industrial terraced property with a 2,400sq ft built-up area priced at around RM780,000 in 2009 is now about RM1.4mil, an increase of about 79% over the past four years.

The rent has also increased to RM4,500 from RM2,900 in 2009 for a similar property.

“The rental yield has, however, declined. In 2009, such property fetched a rent of RM2,900, generating a yield of 4.5% a year, based on the property values at that time.

“Today, a similar property commands a RM4,500 monthly rent, but its yield has dropped to 3.8% a year, as the value has increased to RM1.4mil,” he said.

In view of the shortage, Lee said New Bob Group is now developing the RM45mil The Gate project in Batu Maung, comprising 19 semi-detached and bungalow units of light industrial factories, designed for multiple functions.

“The land areas range between 3,600sq ft to 7,600sq ft, while the built-up areas range between 2,600sq ft and 4,281 sq ft.

“The selling price starts from Rm1.9mil onwards,” he said.

The Gate project, already 60% sold, is scheduled for completion in mid-2014.

In Seberang Prai, Lee said the group is now planning for the development of a condominium project in Permatang Pauh, located strategically next to Tesco Extra, a stone’s throw from the Penang Bridge.

“There will be 148 units, each with a built-up areas of 1,300sq ft. All the units will have a north-south orientation, instead of a south-west orientation to avoid facing the sun, with cross ventilation to reduce power consumption.

“The properties will be priced between RM300,000 and RM400,000. The project will start at the end of this year,” he said.

On the island, Lee said the company is planning a “flashpacker” hotel in Argyll Road, which is based on a blend between a backpacker and budget hotel to cater to upmarket backers.

“We plan to sell the rooms at RM50 per night, which offers a clean and trendy environment.

“Our feedback shows that this concept will be highly appealing to foreigners and local tourists,” Lee said. - By The Star

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